Dutch participation exemption

Are you looking for an expert in the field of Dutch participation exemption and dividend withholding tax exemption? It goes without saying that you are looking for a dependable company you can rely on. We welcome you at DTS Duijn Tax Solutions. Our experienced experts will be happy to get to work for you and take care of your tax affairs in the best possible manner. Businesses that have converted their company to the Netherlands are subject to Dutch tax legislation regulations; according to Dutch regulations, income is taxed at 20-25%. In addition, a Dutch-based organisation owes tax on worldwide profits for the entire organisation. This worldwide profit includes company income, dividend income and interests. With the introduction of Dutch participation exemption, such an income from abroad will no longer be subjected to taxes. The key point of a Dutch participation exemption is that by participating in another business, an entity is exempt from income taxes, based on the results of the other company. This income includes dividends, capital goods and capital gains on participations. Losses are not deductible, with the exception of liquidation losses.

Dutch participation exemption and foreign participation

Dutch participation exemptions are essential if you want to compete with companies abroad. In order for a business to be eligible for granting an exemption, it has to comply with a number of requirements beforehand. The taxable person must fall under Dutch tax legislation. He must possess a minimum of 5% of the nominal paid-up capital of a joint-stock company and he must possess a minimum of 5% of the amount of the participation certificates of a mutual fund that is in circulation. Moreover, the taxable person must be member of a cooperative or an association set up on a cooperative basis. And finally, he must have stock in an open limited partnership as a limited partner, through which he benefits from the profits of the open limited partnership. As soon as these requirements have been met, the taxable person qualifies for a Dutch participation exemption, through which double levies will be avoided and internationally operating companies can become more competitive and face up to international competition.

DTS will help with Dutch participation exemption

The purpose of a Dutch participation exemption is of course to prevent double levying of taxation within your company. Thanks to a Dutch participation exemption, subsidiary companies of a Dutch-based parent company can compete fiscally on equal terms with local companies in foreign markets. We at DTS Duijn Tax Solutions have many years’ experience in dealing with the most complex tax issues. We are more than happy to offer you our services to assess your situation, investigate which arrangement suits your company and assist you in every possible way. Please feel free to contact us.